Facebook på børs – Hva gikk galt?

Facebook Dislike ButtonFelix Salmon over hos Reuters har noen tanker.

Først Facebook Chief Financial Officer David Ebersman.

Ebersman didn’t make one big mistake, he made three. Firstly, as CFO, it was his job to accurately forecast Facebook’s second-quarter figures, and give the company’s banks a good feel for where they would come in. He failed so badly that he was forced to re-file the IPO prospectus just days before the deal came to market, and to whisper in his bankers’ ears that they should probably cut their forecasts for the company’s revenues.

There’s no excuse for getting that wrong, but if there was an excuse, it would be that Ebersman was too focused on the year-long process of managing an awesome IPO. Ha! He screwed that up, too, of course — not least by upsizing the deal at the last minute, raising the number of shares being sold by 25%. In hindsight, that was a very bad idea. But then, after that, he made his third major mistake: he priced the deal for perfection, at $38 per share, even as big institutional investors — the only ones who knew about the new revenue forecasts — were saying that they had no real desire to own the stock at more than $32 per share.

Så Chief Operating Officer Sheryl Sandberg.

Sandberg also conveniently recused herself from many IPO decisions, which doesn’t seem like a very good idea in retrospect. Either she had too much faith in Ebersman and Zuckerberg to do the right things, and should have been much more involved — or else she was deeply involved, behind the scenes, and therefore responsible for some significant part of the resulting fiasco.

Og M. Zuckerberg selv?

It’s his company: the buck stops with him. And he did the IPO no favors at all. First, he insisted on an unprecedented level of individual control over a $100 billion public company; institutional investors never like that. And secondly, he clearly viewed Wall Street and its investors with thinly-disguised contempt, slouching into IPO meetings — when he bothered to turn up at all — in his hoodie, and signally failing to provide the outward-facing leadership that investors crave. Zuckerberg’s refusal to play the Wall Street game is admirable, in some respects — but at the same time is completely inconsistent with a desire to sell $16 billion of shares at a $104 billion valuation.

Hva med ekspertene?

On the Wall Street side of things, the shame list is topped, indubitably, by Morgan Stanley’s technology banker Michael Grimes. He worked hand-in-glove with Ebersman, and all of Ebersman’s decisions can be considered Grimes’s decisions as well. More generally, it was Morgan Stanley’s job to understand exactly what the real demand was for Facebook shares — to sound out investors and price the company just a little bit below what the market was willing to pay. And there’s no doubt that Morgan Stanley failed miserably in that job.

And then there’s the whole scandal of the buried revenue forecasts: the way that Morgan Stanley whispered the new numbers in select clients’ ears, without ever letting the broader investing public know about the downgrade. If you want to develop a reputation as an untrustworthy bank which plays favorites and leaves the little guy out to dry, you could hardly do so in a more effective manner.

Og NASDAQ-flausen:

Then, of course, there’s the Nasdaq. Read Nick Carlson’s interview with an anonymous hedge-fund manager for some of the gorier details here, but in general anything that Nasdaq could mess up, it did mess up. In short: the stock never opened at 11am, as planned, because Nasdaq’s computers weren’t up to snuff. There was a five-minute delay, and then there was a second, 25-minute delay, during which time Nasdaq switched over to a second computer system.

The whole thing turned into a complete disaster. The second computer system didn’t work as planned, and there was an enormous amount of confusion — which still hasn’t been cleared up, in some cases — about where and whether various investors actually managed to sell their stock. As a rule, if you placed an order between 11:05 and 11:30 on Friday, you’re probably in a world of pain today, and you might be relying on the Nasdaq to make you whole for your losses: while you thought you were selling at $42, you might not actually have been able to sell until the shares were at $38 or even less. It seems that the opening price of $42.05 was based only on orders received before 11:05, and ignored all orders after that time, most of which were at much lower levels. Which helps to explain the initial and chaotic plunge in the stock price.

Det var halvparten av Salmons tanker. Les hele.

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